20210205Application.pdf

I{AWLEY
TROXEL
ATTORNEYS AND COUNSEI,ORS
Hawley Troxell Ennis & Hawley LLP
877 MatnStreet, Suite 1000
P.O.Boxl617
Boise, Idaho 837 01,-1617
208.3M.6000
www.hawleytroxell. com
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E-MAIL: [e-mail]
DIRECI DIAL: 208.388.4876
DTRECT FAx: [phone]
February 3,2021
VIA HAND DELIYERY
Ms. Jan Noriyuki
Commission Secretary
Idaho Public Utilities Commission
11331 W. Chinden Blvd. Building 8, Suite 201-A
Boise, lD 83714
Case No. MID-T-21-01 - Application of Midvale Telephone Companyfor
Authority to Borrow
Dear Ms. Noriyuki:
I am enclosing an original and four copies of Midvale Telephone Company's ("Midvale")
Application for Authorrty to Borrow. As noted in the Application, the Loan Documents (as
defined in the Application) are being submitted on a CD contemporaneously with this letter as
Midvale's confidential information for Commission and Commission Staff review.
Midvale will make payment of the applicable filing fee, pursuant to Idaho Code
Section 6l-905, upon the Commission's confirmation of that filing fee and generation of related
invoice. I calculate the filing fee to be $625.00 based on the fact that 47.2% of Midvale's total
book value is located in Idaho. Hopefully, this matches the Commission's calculation. At your
earliest convince, please direct the applicable invoice to my attention via email.
ATTENTION COMMISSION SECRETARY AND HEAD LEGAL SECRETARY: iN
order to meet lender-imposed deadlines, Midvale respectfully requests that the Commission issue
its Order approving the within Application on or before February 26,2021.
48Mt .0007 .t3516144.1
Re:
Ms. Jan Noriyuki
February 3,2021
Page2
Please acknowledge receipt by retuming a stamped copy of this cover letter to me. Thank
you very much for your prompt attention to this matter, and please do not hesitate to contact me
with any questions or concems.
Sincerely,
HAWLEY ENNIS & HAWLEY LLP
Steve Frinsko
Enclosures- Application (+ 4 copies)-CD
4844t.0007 .t35 t6t 44.1
Stephen M. Frinsko, ISB No. 8432
Christopher R. Cook,ISB No. 9864
HAWLEY TROXELL ENNIS & HAWLEY LLP
877 Main Street, Suite 1000
P.O. Box 1617
Boise, ID 83701-1617
Telephone: [phone]
Facsimile: 208-954-5261
Email : sfrinsko@hawleytroxell. com
ccook@hawleytroxell. com
Attorneys for Midvale Telephone Company
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
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IN THE MATTER OF THE APPLICATION
OF MIDVALE TELEPHONE COMPANY
FOR AUTHORITY TO BORROW FROM
THE RURAL UTILITIES SERVICE IN AN
AMOI-]NT NOT TO EXCEED $10,982,238.
Case No. [MID-T-2I-01]
APPLICATION OF MIDVALE
TELEPHONE COMPAII-Y
Midvale Telephone Company ("Applicant") makes this Application pursuant to Idaho
Code Section 61-901 et seq. for authority to execute a Loan and Grant Agreement and
Promissory Note in an amount not to exceed $10,982,238, together with a supplemental
mortgage, from the United States of America, acting through the Administrator of the Rural
Utilities Service ("RUS"). In support of its Application, Applicant states as follows:
1. Applicant is a certificated telephone corporation organized under the laws of the
State of Idaho providing telecommunication services including local exchange service within the
states of Idaho and Arizona. The Certificate of Public Convenience and Necessity (I.{o. 254) of
Midvale Telephone Exchange, Incorporated ("MTE") was transferred to MTE's wholly-owned
subsidiary, Applicant, by OrderNo. 30969 dated December 29,2009 in Docket MID-T-09-03.
APPLICATION FOR AUTHORITY . 1
48Mt.0007 .134s834s.3
2. Applicant seeks funding from RUS in the aggregate amount of $10,982,238 (the
"Loan"). The Loan is structured as a combined grant/loan with a grant in the amount of
$5,491,119 and a loan in the principal amount not to exceed $5,491,119. The Loan will be made
upon the terms and conditions set forth in those certain Loan and Grant Agreement, Promissory
Note, Restated Mortgage, Security Agreement and Financing Statement, and other documents
and instruments contemplated therein and thereby (collectively the "Loan Documents"). The
subject Loan Documents are submitted on a CD contemporaneously with this Application as
Applicant's confidential information for Commission and Commission Staff review.
3. Applicant believes that RUS will designate the Loan as a cost-of-money loan that
will bear interest at the Cost of Money Interest Rate (equal to the current cost of money to the
Federal Government for loans of a similar maturity) not to exceed 7Yo per year as provided in
7 C.F.R. $ 1735.31. The term of the Loan is 22 years from the date funds are first made available
to the Applicant. The actual interest rate will be determined and payable from the date of each
principal advance to the Applicant for the remaining Loan amortization period, as applicable.
The true and correct copy of the loan approval letter dated September 10,2020, is attached as
Exhibit A.
4. The Loan proceeds will be used to pay for, and partially reimburse general funds
to: (a) extend broadband internet to certain additional service areas within the State of Idaho,
including Warm Lake, Warren, Stanley, and Midvale; (b) provide for router and switch upgrades
to handle broadband traffic growth; (c) deploy additional fiber optic and buried cable networks
in certain new Idaho service areas, including Warm Lake, Warren, Stanley, and Midvale;
APPLICATION FOR AUTHORITY - 2
4844t.0007 .13458345.3
(d) extend fiber-to-the-home and broadband Ethemet transport facilities to provide larger pipes
and redundant paths; and (e) for related system improvements.
5. The proposed transaction is consistent with the public interest. The extension of
broadband and fiber service and related upgrades will provide and improve service for
Applicant's Idaho customers and make it possible for Applicant to meet new service demands.
Extension and construction of additional infrastructure will further serve the goals of universal
internet service.
6. A copy of the Applicant's most recent Annual Report showing the authorized and
outstanding classes of Applicant's securities is on file with the Commission, and the Applicant
respectfully requests the Commission take official notice thereof.
7. A certified copy of Applicant's Board of Directors' resolution authorizing the
proposed transaction is attached as Exhibit B. The subject Loan Documents referenced as
exhibits in Exhibit B have been removed and are submitted on a CD contemporaneously with
this Application as Applicant's confidential information for Commission and Commission Staff
review as noted inParagraph2.
8. A Proposed Order granting this Application is attached as Exhibit C.
9. Notice of this Application will be published within seven days in The ldaho
Statesman (Boise) and the ldaho Business Review (Boise), as required under Rule 141.08 of the
Commission's Rules of Procedure. A copy of this Notice is attached as Exhibit D.
10. Applicant submits that the public interest does not require a hearing on this matter
and it requests that the Commission process this Application and determine this matter by
Modified Procedure, under Rule 144 of the Commission's Rules of Procedure. If the
APPLICATION FOR AUTHORITY - 3
48M1.0007.t3458345 3
Commission determines that formal proceedings on this Application are necessary, Applicant
stands ready for immediate hearing.
11. 47.2 percent of Applicant's total book value is located in Idaho. Applicant will
make payment of the applicable filing fee, pursuant to Idaho Code Section 61-905, upon the
Commission's calculation of the same and generation of related invoice.
12. All notices and communications with regard to this Application should be served
upon:
Steve Frinsko
Hawley Troxell Ennis & Hawley LLP
877 Main Street, Suite 1000 (ZIP 83702)
P.O. Box 1617
Boise, Idaho 837 0l-1617
Telephone : [phone]
Facsimile: 208-9 54-5261
sfrinsko @hawleytroxell. com
John Stuan
President & Chief Executive Officer
Midvale Telephone Company
2205 Keithley Creek Road
Midvale,Idaho 83645
i [e-mail]
Telephone: [phone]
13. Applicant respectfully requests, pursuant to Rule 145 of the Commission's Rules
of Procedure, that the Commission process this Application on an expedited basis and issue its
Order granting this Application on or before February 26,2021.
WHEREFORE, Applicant respectfully requests an Order of this Commission:
1. Granting the foregoing Application and authorizing Midvale Telephone Company
to execute and deliver to the Rural Utilities Service a Loan and Grant Agreement, Promissory
Note, Restated Mortgage, Security Agreement and Financing Statement, and other documents
APPLICATION FOR AUTHORITY - 4
48441.0007 . t3 4s83 4s.3
and instruments contemplated therein and thereby for a combined loan and grant in an amount
not to exceed $10,982,238; and
2. Granting such other relief as the Commission deems just and reasonable in this
matter.
Dated 2021 HAWLEY S & HAWLEY LLP
By:
M. Frinsko, ISB No. 8432
Attorney for Midvale Tel ephone Company
APPLICATION FOR AUTHORITY . 5
48441.0007 .13458345.3
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on tnis 44 auy ot fq&^lea. ,2021,I caused to be
served a true and correct copy of the foregoing document by the meth6d indicated below, and
addressed to the following:
Jan Noriyuki, Secretary,
Idaho Public Utilities Commission
11331 West Chinden Boulevard
Building 8, Suite 201-A
Boise, ID 83714
[ ] U.S. Mail
It(Hand Delivered
[ ] Overnight Mail
[ ] Facsimile
[ ] E-mail
M. Frinsko
CERTIFICATE OF SERVICE - APPLICATION FOR AUTHOzuTY
48441.0007 .13 4s83 45.3
EXHIBIT A
LOAN APPROVAL LETTER
[Attached]
EXHIBIT A . APPLICATION FOR AUTHORITY
48441.0007 . t3 4 583 45 .3
USDA
:United States llepartment of Agriculture
Rural Development
Rural Utilities Service
1400 lndependence
Avenue 5W
Room 2868 Stop
1599
Washington, DC
20?50
September 10,2020
Mr. John Stuart
Chief Executive Officer
Midvale Telephone Company
PO Box 7
Midvale, ldaho 83645
Dear Mr. Stuart,
We are pleased to inform you that your application for a loan/grant from the Rural
Utilities Service ReConnect Program has been approved. We are offering you a
grant in the amount of 55,491,Li.6 and a loan in the amount of 55,491,116 with an
amortization period of 22 years, carrying the interest rate at the Treasury rate for
the remaining amortization period at the time of each advance of funds. The
loan/grant combination is subject to the terms of the enclosed Loan/Grant
Agreement. The grant portion designation for your project is lD 1701-455 and the
loan portion designation is lD 1701-A59. This designation should be referenced in
all future correspondence concerning this Ioan/grant combination.
ln order to comply with USDA's approprlations law requirements, you will need to
execute and submit the enclosed Form AD-3031, '?ssurance Regarding Felony
Conviction or Tax Delinquent Status for Corporate Applicants."
Please be advised that pursuant to federal regulations at 7 CFR 1970.11(b), the
Agency has determined that assured access to ReConnect funding for this Project
is necessary for economic rural development. As a result, the
attached Loan/Grant Agreement is subject to the completion of alI necessary
environmental procedures required by Federal law. Given that all such procedures
have not yet finished on your Projecf no work on the Project, whether work which
will be reimbursed through federal funds, or work which will be paid for with
Awardees own funds, may be engaged until successful completion of the
environmental reviews. Awardee acknowledges that unless it has received written
notice from the Agency, it will not engage in any work on the Project, under any
circumstances, except for that required to finalize the environmental reviews.
Failure to abide by this requirement will result in the termination of
the Loan/Grant Agreement. Additionally, Awardee acknowledges that should any
findings in the environmental reviews require significant changes to the Project,
and as a result to the Loan/Grant Agreement, such changes will constitute an
immediate deobligation of federal funding and the termination of the Loan/Grant
Agreement, and will not result in an amended agreement until revised terms are
agreed upon and funding is determined to be still available.
USDA is an equal opportunity provider, employer, and lender
Please indicate your acceptance of this offer by signing the second copy of this
letter, and within 10 days from the date hereof, returning lt both by email and in
hard copy to:
Mr. Kenneth Kuchno, Deputy Assistant Administrator
Policy and Outreach Division
Stop 1599, Room 5135, South Building
1400 lndependence Avenue, 5W
Washington, DC 20250-5L35
[e-mail]
Upon receipt of the second copy of this letter, the loan/grant documents will be
prepared and forwarded in the near future for execution. This loan/grant is
approved with the understanding that the loan/grant documents will be
authorized and executed by your organization and returned to us within the time
period whlch will be set forth in the letter of transmittal.
Although we are very glad to be making this loan/grant combination award to
Midvale Telephone Company, we would appreciate it if you did not announce this
loan/grant offer until USDA makes a formal announcement of your acceptance of
the loan/grant.
Sincerely,
CHAD
RU PE
Digitally signed
'.by CHAD RUPE
Date:2020.09.14
09:02:06 -04'00'
CHAD RUPE
Administrator
Rural Utilities Service
ACCEPTANCE:
M idvale Telephone Compa ny
By:
Name:
Title: T>ag:=,rr>cr.:r / eC>
Date: g- /b- zozo
Enclosures:
Loan/Grant Agreement
Form AD-3031"
A.A#: RECON 147
USDA is an equal opportunlty provider, employer, and lender,
EXHIBIT B
APPLICANT'S BOARD OF DIRECTORS' RESOLUTION
[Attached]
EXHIBIT B - APPLICATION FOR AUTHOzuTY
48441.0007 .13458345.3
MIDVALE TELEPHONE COMPANY
AN IDAHO CORPORATION
SECRETARY'S CERTIFICATE
I, Nick Rynearson, do hereby certify that:
1. I am the duly elected, qualified and acting Secretary of Midvale Telephone
Company, an Idaho corporation (the "Corporation").
2. The following resolutions are true and correct copies of resolutions duly adopted
by the Corporation's Board of Directors (the "Board") at a meeting held on January 31,2021
duly called in accordance with the bylaws of the Corporation (the "Meeting"), with those
resolutions entered in the Corporation's minute books:
A. The Board of Directors ("Board") of Midvale Telephone
Company ("Corporation"), is familiar with the Corporation's proposal to seek
funding from the United States of America, acting through the Administrator of
the Rural Utilities Service ('RUS"), in the aggregate amount of $10,982,238,
consisting of a grant in the amount of $5,491,119 and a loan in the principal
amount not to exceed $5,491,119 to be made upon the terms and conditions set
forth in those certain Loan and Grant Agreement, Promissory Note, Restated
Mortgage, Security Agreement and Financing Statement, a Deposit Account
Control Agreement, and other documents and instruments contemplated therein
and thereby (collectively the "Loan Documents");
B. The Restated Mortgage, Security Agreement and Financing
Statement provides for RUS to have a first lien on the Corporation's property, and
which mortgage is intended to secure the loan, as well as all prior loans from RUS
in parity; and
C. The Board has reviewed the Loan Documents and desires and has
determined that it is in the best interests of the Corporation to approve and
execute the Loan Documents, by and between the Corporation and RUS, dated as
of December 77,2020.
D. True and correct copies of the following Loan Documents are
attached:Exhibit A (Loan and Grant Agreement), Exhibit B (Promissory Note),
and Exhibit C (Restated Mortgage, Security Agreement and Financing
Statement).
E. Forms containing model terms for the Deposit Account Control
Agreement are attached as Exhibit D.
NOW THEREFORE, IT IS:
RESOLVED, that the Corporation: (a) seek and accept a grant
SECRETARY'S CERTIFICATE - MIDVALE TELEPHONE COMPANY - 1
48441 .0007 . t345953 0.4
from RUS in the amount of $5,491,119 ("Grant") upon the terms as set forth in
the Loan Documents; (b) borrow from RUS an amount not to exceed $5,491,119
("Loan") upon the terms as set forth in the Loan Documents; and (c) use the
proceeds of such Grant and Loan for such pulposes as approved by RUS and
consistently with the requirements of other existing agreements and security
documents;
RESOLVED, that all proceeds of the Loan and Grant must be
deposited in the Corporation's account with Wells Fargo, account number ending
8861 (Acct. ID-514) ("Pledged Deposit Account"), and must remain separate
from all of the Corporation's other funds and accounts, and the Pledged Deposit
Account will be pledged to RUS and held in accordance with the provisions of the
Loan Documents;
RESOLVED, that, should RUS not approve the deposit account
contemplated by the preceding resolution as an appropriate deposit account to
serve as the Pledged Deposit Account, the Corporation is authorized and directed
to open a separate account with a bank approved by RUS, and all proceeds of the
Loan and Grant must be deposited in such account, which shall be pledged to
RUS and held in accordance with the provisions of the Loan Documents, and
which account will be the "Pledged Deposit Account" for purposes of these
resolutions;
RESOLVED, that the officers of the Corporation are, and each of
them is, authorized and directed to negotiate the terms of the Deposit Account
Control Agreement containing substantially the same terms and conditions as the
model agreement attached as Exhibit
RESOLVED, that John Stuart, as president and CEO of the
Corporation, in conjunction with the Loan and Grant, is authorized on behalf of
the Corporation to execute and deliver as many counterparts of the Loan
Documents as required by RUS;
RESOLVED, that the officers of the Corporation are, and each of
them is, authorized and directed to execute, deliver, and certify in the name and
on behalf of the Corporation, all such instruments and all such other documents,
make all such payments and do all such other acts as such officer, insuch officer's
discretion, deems necessary or advisable to carry out the purposes and intent of
the foregoing resolutions or the transactions contemplated thereby; and
RESOLVED, that any person or entity may rely upon any of the
foregoing upon presentation of a copy of this Resolution certified by the Secretary
or any Assistant Secretary of the Corporation declaring that this Resolution has
not been later revoked.
SECRETARY'S CERTIFICATE - MIDVALE TELEPHONE COMPANY - 2
4844t .0007.t3459s30.4
aJ.
bylaws.
The Meeting was duly called and hold in accordance with the Corporation's
4. Each member of the Board was fumished with notice of the Meeting in
compliance with the Corporation's bylaws.
5. None of the resolutions set forth above has been rescinded or modified.
The undersigned makes the foregoing certificafion effective as January 37,2027.
Nick Secretary
Seal)
SECRETARY'S CERTIFICATE. MIDVALE TELEPHONE COMPANY - 3
4844 1 .0007. 1 3459530.4
EXHIBIT A
Loan Agreement
[attached]
EXHIBIT A - SECRETARY'S CERTIFTCATE
48441.0007.t3459530.4
EXHIBIT B
Promissory Note
[attachedl
EXHIBIT B - SECRETARY'S CERTIFICATE
4844 1 .0007. 1 3459530.4
EXHIBIT C
Restated Mortgage, Security Agreement and Financing Statement
Iattachedl
EXHIBIT C - SECRETARY'S CERTIFICATE
48441 .0007 .1345953 0.4
EXHIBIT D
Model Deposit Account Control Agreement
[attached]
EXHIBIT D . SECRETARY'S CERTTFICATE
4844 1.0007. r 3459530.4
EXHIBIT C
PROPOSED ORDER
[Attached]
EXHIBIT C - APPLICATION FOR AUTHORITY
48441.0007 .13458345.3
Stephen M. Frinsko, ISB No. 8432
Christopher R. Cook, ISB No. 9864
HAWLEY TROXELL ENNIS & HAWLEY LLP
877 Main Street, Suite 1000
P.O. Box 1617
Boise, ID 83701-1617
Telephone: [phone]
Facsimile: 208-954-5261
Email : [e-mail]
ccook@hawleytroxell. com
Attorneys for Midvale Telephone Company
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION
OF MIDVALE TELEPHONE COMPANY
FOR AUTHORITY TO BORROW FROM
THE RURAL UTILITIES SERVICE ("RUS")
IN AN AMOI.]NT NOT TO EXCEED
$10,982,238.
CaseNo. [MID-T-21-01]
PROPOSED ORDER
On Midvale Telephone Company ("Applicant") filed an Application
for Loan Approval ("Application") with this Commission requesting authority to execute certain
Loan Documents (as defined in the Application), including loan contracts and supplemental
mortgages, for a loan amount not to exceed $10,982,238 with the United States of America,
acting through the Administrator of the Rural Utilities Service ("RUS").
After examining the Application and supporting documents and being fully advised in the
premises, the Commission hereby finds that a hearing in this matter is not required, and that the
proposed transaction is consistent with the public interest and the Applicant's proper
performance of its duties as a public utility.
IT IS THEREFORE ORDERED that the Application of Midvale Telephone Company for
authority to execute the Loan Documents, including applicable loan contracts and supplemental
48M1.0007.13460387.2
mortgages with the RUS, for a loan in an principal amount not to exceed $10,982,238 is hereby
granted.
DONE by Order of the Idaho Public Utilities Commission this day of
2021
Paul Kjellander, President
Kristine Raper, Commissioner
Eric Anderson, Commissioner
ATTEST
JanNoriyuki
Commission Secretary
-2-
4844 1.0007 . 13 4603 87 .2
EXHIBIT D
NOTICE OF THIS APPLICATION
LEGAL NOTICE OF MIDVALE TELEPHONE COMPANY'S
APPLICATION FOR AUTHORITY TO BORROW FUNDS
NOTICE IS HEREBY GIVEN that on 2021, Midvale Telephone
Company, completed and filed with the Idaho Public Utilities Commission an Application for
authority to borrow up to $10,982,238 from the United States of America, acting through the
Administrator of the Rural Utilities Service. The loan will be evidenced by, without limitation, a
Promissory Note given to the Rural Utilities Services and secured by a Restated Mortgage,
Security Agreement, and Financing Statement.
The Application is on file and is available for public inspection at the Idaho Public
Utilities Commission.Any person desiring to comment on that Application must file petitions or
protests with the Idaho Public Utilities Commission within 14 days of the filing date. If no
protests are received within this time limit, the Commission may consider the Application and
enter its Order without setting the matter for hearing. If written protests are filed with the
Commission within the time limit set, the Commission will consider the suune, and in its
discretion, may set a hearing. Petitions or protests must be filed with: Jan Noriyuki, Secretary,
Idaho Public Utilities Commission, 11331 W. ChindenBlvd. Building 8, Suite 20I-A, Boise,
Idaho 83714.
Jan Noriyuki, Secretary
Idaho Public Utilities Commission
EXHIBIT D - APPLICATION FOR AUTHORITY
4844 1.0007 .13 4 583 45.3